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PA is Key Player in US Casino Industry Uptrend

Posted on May 10th, 2011

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A recent study revealed that Pennsylvania was a key player of the nation’s casino revenue increase in 2010. The good news was like a breath of fresh air after the industry experienced two years of dwindling income. The revenue decrease casinos suffered for two years was brought about by the economic recession. During those times, the industry resorted to finding new ways to keep its head afloat until the fiscal situation improved. Such strategies included streamlining operations, paring workers and putting off buying new equipment and product.

In 2010, it seems that the industry’s perseverance paid off. Based on study results released on May 04, the casino industry recovered from a two-year slump when it obtained revenues amounting to $34.6 billion in 2010, which translates to a 0.9 percent increase from 2009 statistics. In fact, casinos located in 22 states are able to bring contribute considerably to the nation’s economy. The industry provided employment to 340,564, and dished out $13.3 billion in wages. More importantly, the US casino industry is responsible for $7.6 billion of the nation’s $34.6 billion in gross revenue. The said amount was obtained from direct gaming taxes proceeds.

During a conference call with US gaming writers, Frank J. Fahrenkopf Jr—president and chief executive officer of the Washington-based American Gaming Association which spearheaded the said research—said that the results of the study substantiates that there is much that can be expected from the industry. Fahrenkopf confidently identified Pennsylvania as the top contributor to the previous year’s revenue increase. The said state incurred a 26.4 percent increase in casino, which was pegged at $2.49 billion. It also boasts of an employment rate that went up by nearly 39 percent or 12, 664 casino jobs.

In fact, because of its revenue, Philadelphia and Pittsburgh are considered part of the top 20 casino markets. Moreover, Philadelphia was ranked as the top US racino market, due to the presence of Parx Casino in Bensalem and Harrah’s Chester Casino and Racetrack in Delaware County. He explained that the Commonwealth owes its exponential progress to Pennsylvania as it was able to influence the whole of Northeast, as well as Connecticut which has progressed to providing table games in addition to its slots. Fahrenkopf also mentioned that Pennsylvania also directly and indirectly had some bearing on Delaware which now offers table games, and on Maryland with its new casinos.

However, the success achieved by Pennsylvania seems to have negative effects in other states. Also based on the study, Atlantic City in New Jersey reflected the steepest revenue downtrend of 9.4 percent. From revenues of $3.94 billion, Atlantic City fell back with $3.57 billion. Along with this, more than two thousand employees lost their jobs, which translate to an employment decline of 6.1 percent. Such dismal figures for 2010 prompted Gov. Chris Christie to adopt measures in order to resuscitate the Atlantic’s City’s casino industry. Fahrenkopf expressed his support to Christie’s efforts, adding that New Jersey was truly one of those negatively affected by the Pennsylvania casinos. With Delaware coming in as additional player, Atlantic City truly must brace itself for more challenging times. He acknowledges that casino operators in Atlantic City have extended their support to the governor’s initiatives.

Furthermore, Fahrenkopf comments that Atlantic City has to come up with something that can draw casino-goers once again. He conveyed his optimism that Christie’s approach in dealing with the current scenario of Atlantic City shall bear good fruit in the near future. The American Gaming Association’s study, entitled State of the States: The AFA Survey of Casino Entertainment, features data on gaming revenues, tax contributions, employment and wages. These data were gathered from commercial casinos all over the country, and are presented individually per state, with consolidated figures for the national data. However, the study does not have data on tribal casinos.

The study is the thirteenth conducted by the association, and is observed to be different in some aspects from the previous ones released. For example, states such as Delaware and Maine which only had racinos were previously tallied separately. Or this year, however, both were categorized under the commercial casino sector. The association explained that the change was because racinos nowadays seem to be no different from casinos. It was further elaborated that the change shall give “a fuller and more accurate picture of the industry’s true impacts on national, state and local economies”.